When you go into a store and you see products branded with that store’s name, you are seeing private branding in practice. A private brand, also called a store brand, is brand that carries the retailer’s name, or is otherwise exclusive to that retailer, but is produced by another company. In some cases, industry leaders may produce the private brand for the retailer.

Function

Private brands exist primarily because they tend to be lower in price than their counterparts; otherwise, a consumer would pick the national product. Good example of this is the store brands you see in supermarkets and large retailers, such as Target, Publix and K-Mart. Most shoppers choose private brands because they can save a little on the price while getting a comparable item.

Co-branding

In some cases a product may be co-branded, meaning that it carries the name of the retailer and the brand of the manufacturer. This technique allows both the retailer and manufacturer to reach different markets. Co-branding can be a new product entirely, as seen in the Sports Kit by Nike and Apple, or enhance a current line, like Pottery Barns’s Colors available at Benjamin Moore Paint.

Destination Brands

Some private brands turn into destination brands, meaning that a customer will frequent a particular retailer just to buy that brand; no other retailer sells the brand. Retailers pursuing a single-brand strategy tend to offer lower prices than their multi-brand retailer counterparts. Many retailers sell only their own private brand, such as Zara, H&M; and Ikea.

House of Brands

In order to market to specific demographics, some retailers will offer a “house of brands” -- in other words, a brand to suit every demographic. For example, Macy’s offers 15 private brands, from Epic Threads, which is designed for tweens, to Alfani clothing and accessories for men and women looking for a refined, modern and professional fit.

About the Author

Renee O'Farrell is a freelance writer providing valuable tips and advice for people looking for ways to save money, as well as information on how to create, re-purpose and reinvent everyday items. Her articles offer money-saving tips and valuable insight on typically confusing topics. O'Farrell is a member of the National Press Club and holds advanced degrees in business, financial management, psychology and sociology.